Left-winger Jarvis, a £500,000 summer signing from Gillingham, pounced from close range in the 73rd minute to cancel out Iain Hume's early opener.
It was tough on Leicester who appeared on course to get the win that they needed to haul themselves out of the relegation zone.
They held the edge for most of the game and looked set to earn new manager Ian Holloway only his second victory in eight games.
But their failure to turn that domination into goals - along with the heroics of Wolves keeper Wayne Hennessey - proved costly.
Wolves managed to step up a gear in the second half and were rewarded when Jay Bothroyd released Andy Keogh down the left wing.
Keogh's cross was pin-point and Jarvis had the simple task of converting from six yards to earn out-of-sorts Wolves only their second point in four games and leave them in eighth place.
Leicester caught Wolves cold when Hume pounced - just two minutes after changing his boots - with a clinically taken free-kick.
Michael Gray was adjudged to have fouled Collins John and, from 25 yards, Hume curled his shot around the Wolves wall and past Hennessey into the corner of the net for his sixth goal of the season.
Leicester should quickly have added to their advantage when Bruno N'Gotty sent John clear in the 18th minute. But the on-loan Fulham marksman was denied by Hennessey who dived bravely at his feet six yards from goal.
Wolves had to ride their luck again five minutes later when a corner by Stephen Clemence picked out Gareth McAuley.
McAuley powered in a header from ten yards, but saw his effort flash just inches the wrong side of the post.
McCarthy turned to Freddy Eastwood at half-time to try and inject some life into his side but even before the Wales international had a chance to make an impact Wolves should have been 2-0 behind.
Once again they were saved by Hennessey in the 51st minute when he frustrated John who had been released by a smart James Chambers pass.
That escape belatedly sparked Wolves into life and City goalkeeper Marton Fulop was finally tested after 53 minutes when Eastwood let fly from 20 yards.
Fulop was equal to the task on that occasion but was powerless to deny Jarvis 20 minutes later.